Llona invested $$100,000$ in an $18-$month certificate of deposit. She needed to cash in the CD to meet some unexpected expenses. Llona earned $$2,000$ in interest income from the CD$,$ but only received $$1,800$ because the amount was reduced by a $$200$ penalty for early withdrawal. As a result, Llona will report the $$2,000$ as gross income, Blank$\_\_\_\_\_\_.$

Multiple choice question.

and deduct the $$200$ for AGI

but can only deduct the $$200$ if she itemizes deductions

but the $$200$ penalty is not deductible